Composite beverage classification under tariff rules favours the heading last in numerical order when carbonation and fruit juice both define the product.

Composite beverages containing both carbonation and fruit juice are classified by applying the General Rules for Interpretation where no specific tariff entry separately covers the mixed product. Because the goods were marketed as carbonated beverages with fruit juice and neither competing heading fully captured their character, Rules 3(a) and 3(b) did not resolve the issue; Rule 3(c) applied, so the heading last in numerical order prevailed. The products were therefore classifiable under heading 2202 99 20 as fruit pulp or fruit juice based drinks, not under heading 2202 10 as aerated waters.

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Issues: Whether carbonated beverages with fruit juice, containing 2.5% fruit juice in lime variants and 5% in other fruit variants, were classifiable under heading 2202 10 as aerated waters containing added sugar or flavoured goods, or under heading 2202 99 20 as fruit pulp or fruit juice based drinks for the purpose of customs duty and IGST.

Analysis: The goods were sold and represented in the market as carbonated beverages with fruit juice, not as pure fruit juice drinks or ordinary aerated waters. The Customs Tariff and the IGST notification made the tariff classification under the Customs Tariff relevant for IGST as well, and the General Rules for Interpretation governed the choice between competing headings. Applying those rules, the goods could not be confined to a single predominant ingredient, because both carbonation and fruit juice contributed to their character. The product description in the market, the FSSAI recognition of a separate category for carbonated beverages with fruit juice, and the absence of a separate specific entry in the tariff for such a composite product supported the view that neither of the competing headings fully captured its character. Rule 3(a) and 3(b) did not resolve the classification, so Rule 3(c) applied and the heading occurring last in numerical order was attracted. The earlier decisions relied upon by the importer and the Department supported this approach, and the Advance Ruling and GST Council references were not binding.

Conclusion: The goods were correctly classified under heading 2202 99 20 as fruit pulp or fruit juice based drinks, and not under heading 2202 10.

Final Conclusion: The departmental challenge to the classification failed, and the classification accepted by the importer was sustained.

Ratio Decidendi: Where a composite beverage contains both carbonation and fruit juice and no specific tariff entry separately covers that mixed product, classification is governed by the General Rules for Interpretation, and if the competing headings remain equally applicable, the heading last in numerical order prevails.

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